Normally, a reconciliation is required between the proprietary fund financial statements and the business-type activities column in the government-wide financial statements. C. Statements include the Statement of Net Assets (Balance Sheet); Statement of Revenues, Expenses and Changes in Fund Net Assets: and Statement of Cash Flows. D. The Statement of Cash Flows may be prepared using either the direct or indirect methods. 7. Which of the following choices regarding the fiduciary fund financial statements is true?
If there is conflict between this Article and Article 4 or 9, Articles 4 and 9 govern. Regulations of the Board of Governors of the Federal Reserve System and operating circulars of the Federal Reserve Banks supersede any inconsistent provision of this Article to the extent of the inconsistency. Article 4: Bank Deposits and Collections: UCC Article 4 covers the liability of a bank for action or non-action with respect to an item handled by it for purposes of presentment, payment, or collection is governed by the law of the place where the bank is located. In the case of action or non-action by or at a branch or separate office of a bank, its liability is governed by the law of the place where the branch or separate office is located. Article 5: Letters of Credit: UCC Article 5 applies to letters of credit and to certain rights and obligations arising out of transactions involving letters of credit.
Although paper monies, such as certificates, stocks, currency, or bonds, are normally kept in financial institutions because of safety or convenience, the popularity to maintain possession of valuables is on the rise. The lack of hassle and ease of liquidity are two reasons for the rise. Standard of Deferred Payment - Money can be used to purchase goods and services, and pay at a later date or with a series of payments. For example, some furniture or electronic stores offer “buy now, pay later” specials as an incentive for purchasing. Federal Reserve and Monetary Policy The Federal Reserve is considered independent because, although it is accountable to Congress, its decisions do not have to be ratified by Congress or the President.
Therefore, understanding exactly how monetary policies will affect the economy is extremely important. Monetary policies generally will raise or lower interest rates, which will ultimately affect individuals and business demand for goods and services. Unfortunately, many individuals do not understand the entire concept surrounding the Federal Reserve real interest rate. For example, any magnitude of decreasing the real rates will lower the cost of borrowing; this will increase investment spending, and influence individuals to buy durable goods. These items may consist of automotive, recreational vehicle, homes, and higher educational opportunities.
Federal Reserve banks took over the power to issue bank notes, and were granted the poser to buy and sell government securities, loan money to member banks, and to clear checks between banks. The Fed also also requires that member banks hold cash in reserve at a specified rate, currently 10% of their deposits (pg 205). The Fed’s customers are member banks, much in the same manner that depository institutions service the general public. The Fed also exercises powers to influence the
Affinity cards are branded credit cards that carry both the logo of the banking institution as well as the logo of the sponsored organization. 6. Interest rates go up and down according to interest rates in the economy. 7. Credit card costs are determined by your income, debt levels, and repayment history. 8.
Finance 341 December 17, 2009 Dr. Thomas Payne Traditional and Roth IRAs Before the main discussion, an understanding of what an Individual Retirement account is. An IRA is a retirement plan that is “set up with a financial institution like a bank, broker, or mutual fund in which contributions may be invested in many types of securities such as stocks, bonds, money market, and CDs” (Lewis). Any person that has earned income, regardless of age up until 70 ½, is qualified to open and contribute to an IRA. Earned is income is also interpreted as taxable income. Compensation for IRA purposes includes but not limited to “wages, salaries, fees, tips, bonuses, commissions, taxable alimony, and separate maintenance payments” (Braze).
These four basic financial statements are interrelated and consist of: income statement, retained earnings statement, balance sheet, and statement of cash flows. Accounting is an information system using three basics activities which are identify, record, and communicate economic events to interested users. Companies identify economic events relevant to its business. Financial activities are recorded systematically in a chronological order of events to provide history. Recording also will classify and summarize economic events.
Open market operations are the United States Treasury’s and Federal agency securities’ purchases and sales. The objective of the open market operations is to discover a “desired quantity of reserves or a desired price (the federal funds rate)” (“Board”). The federal funds rate is the rate at which certain bank establishments are able to lend balances to the Federal Reserve to other particular banks overnight. It seems like such a great idea, but now a days, the Federal Open Market Committee is unsure about the risk it bestows to the extensive goals of price solidity and manageable economic
(asic.gov.au) · As the financial markets became mainstream and matured, the access to capital markets and their scrutiny have both increased. Along with the added volatility, the lending markets have seen similar risks as equity markets. With the increased speed of both financial information and market changes, the rating agencies are more important as a first step, as they are to be scrutinized for their ratings and the trend in their rating changes. (investopedia.com) · CRAs and their ratings played a critical role in the recent market turmoil. Unlike securities trading on deeper, more transparent markets, credit ratings have had an inordinate impact on the valuation and liquidity of subprime RMBSs and RMBS backed